Israel and South-East Asia – where is the potential?

Prime Minister Malcolm Turnbull’s focus is on the Association of South East Asian Nations (ASEAN) as he prepares to host the ASEAN-Australia Special Summit.

This grouping is made up of 10 widely diverse, but geographically connected countries – from the affluent, hi-tech hub of Singapore, to the democratic archipelago of Indonesia, from communist Vietnam to the tiny monarchy of Brunei.

It is also a religiously and culturally diverse grouping containing the world’s most populous Muslim country, Indonesia, as well as its Muslim majority neighbours Malaysia and Brunei. The Philippines is a staunchly Catholic country, while Thailand, Cambodia and Laos have large Buddhist majorities.

While ASEAN was formed in 1967 to strengthen regional bonds, it has never had the economic clout of a customs union like the European Union, or the military clout of an alliance like NATO.

It is for these reasons that most countries have formed bilateral partnerships with ASEAN member states, rather than formal ties to the group, Israel included. Israel has long had deep links with some ASEAN member-states, while its relationship with others are more fragile or less developed.

High on Israel’s list of ASEAN allies is Singapore. Israeli Prime Minister Benjamin Netanyahu made his first visit to the tiny city-state in February 2017 where he declared his own “pivot to Asia“.

That friendship well and truly came out of the shadows in 2016, when Prime Minister Lee made an official trip to Israel, and then during Netanyahu’s 2017 stopover in South-East Asia where he gushed, “We believe in Singapore, we admire Singapore”.

Today, the Israel-Singapore trade relationship is worth US$1.35 billion (2016) and Israel has a trade office in Singapore, which is dedicated to growing Israeli business with the city-state and its neighbours.

Singapore is looking to Israel for assistance in moving away from its roots as a global financial hub and establishing sustainable venture capital to develop local start-ups. Singapore’s stock exchange is also competing with the ASX as a destination for Israeli start-ups looking to list.

Moving further north, Israel has long-standing relations with the Philippines dating back to 1947 when the Philippines was the only Asian nation to vote for the establishment of the State of Israel.

And despite the bluster over military purchases, trade figures between Israel and the Philippines remain very low (approx. US$175 million in 2016), although it is understood that the two countries do engage in intelligence sharing over threats posed by Islamist terrorists.

People-to-people links remain strong between Israel and Thailand and the two countries share knowledge and expertise in agriculture and intelligence.

According to a report by academics from the University of Haifa, in 2016, there were nearly 22,000 Thai migrant workers in Israel, making up 80 per cent of Israel’s total migrant worker population.

While some international NGOs have criticised conditions for migrant workers in Israel, Israel signed a bilateral agreement in 2002 with Thailand to improve conditions, which the University of Haifa report said has gone some of the way to making improvements.

Anyone who has travelled to Thailand’s tourist hotspots will also have noticed the ubiquitous post-army service young Israeli traveller. These travellers are unlikely to stay long, but there is hope agriculture, commercial and security ties will extend further.

Israel’s relationships with ASEAN’s large majority Muslim members – Indonesia and Malaysia – are a bit more fraught and are unlikely to be normalised absent a resolution to the peace process. To date, Israel does not have diplomatic relationships with either nation.

AIJAC has previously described the relationship between Israel and Indonesia as “a relationship in waiting“. It appears the waiting will go on, with Prime Minister Netanyahu forced to deviate his flight path when travelling from Singapore to Australia in 2017 to accede to Indonesia’s request that he stay out of its airspace. That being said, informal links are being formed – including visits by Indonesian journalists and religious leaders to Israel, Israeli humanitarian aid being supplied to Indonesians during troubled times and some very limited trade (approx. US$163 million in 2016, although some sources quote it as high as US$500 million). Netanyahu has openly called for formal diplomatic ties between the countries.

Relations with Malaysia are even icier, although trade is more substantial (nearly US$600 million in 2016) thanks to Israeli technology exports from its Intel plants. Last month, Israeli diplomat David Roet was the first Israeli from the diplomatic corps to visit Malaysia since 1965 when he attended the World Urban Forum in Kuala Lumpur. Unfortunately, he reported back that Malaysia would be a “very tough nut to crack” for Israel. His local hosts admitted that the only reason the Israeli delegation was invited was because as a UN-affiliated event, representatives of all UN member-states had to be welcomed.

Prime Minister Netanyahu may be pivoting to Asia with great success in China and India, but the results are likely to be mixed among the ASEAN member-states. While there are significant areas of overlapping interest – from hi-tech research and development, to agriculture, to intelligence sharing – cultural differences and traditional Muslim sensitivities over the Palestinian issue can be a stumbling block.

Nevertheless, Israel has recognised that these are relationships it must pursue seriously, given that ASEAN is home to 640 million people, contains current and potential economic powerhouses and shares land and sea borders with rising powers China and India. Despite the considerable progress over the past decade or more, it will take perseverance and creativity to break through to the remaining holdouts – something Israeli diplomats and businessmen have shown they have in spades.